Forex: trading strategy
The notion of trading strategy
The interpretation of the term " trading strategy" can be considered as a kind of system analysis of the market situation in the context of a particular trading instrument, which is aimed at predicting of prices motion vector on the working time frames. In the most cases, this analysis is based on the principles of technical analysis, which include: advisors, indicators, scripts and settings of template.
Under the trade tactics is commonly understood mechanism of the deal beginning , its accompaniment and ending.
Trading system includes a set of instructions, which provide a systematic entrance into the market and exit from it, that is, opening and closing of the deal, without taking into account the final result. So trading strategy and tactics constitute trading system.
Development of your own trading system assumes the presence of skills of analysis of the current market situation in interrelation of various time frames, regardless of the chosen methods of your work. Having the ability to analyze the market, to anticipate the prices motion vector on a specific time frame with a high accuracy of mathematical expectation, allows you to create your own trading system.
For right choice of: trading methods, anticipated targets and risks, we should define the working time frame. Simultaneously with this its necessary to consider the size of alleged deposits and working lots. Stopping on medium-term or intraday trading with small deposits, you expose yourself on the probability of Margin Call. In the result of absorption of news and market assault - the longest periods of time provide more accurate analysis of the situation.
Its advisable to take into account trends of older time frames, when defining the methods of entrance, protection and exit on your working time frame. Special attention should be paid to the method of exit from the deal, because there are alot of such methods. Depending on the trader's qualification is selected the most optimal method in a given market situation, including unprofitable deals. Elaboration of this element of trading tactics requires special minuteness and attentiveness.
Formalization of trading strategy
There is only a set of intentions and assumptions for writing purely your trading strategy. As soon your trading tactics will gain "a readable form", as soon strategy will get the status "binding for execution". This will allow you to analyze in detail and correct it at the auction.
Testing of trading strategy
Your trading strategy should be subjected to tests, using special software, which are called testers. Beginners are wrong in the fact, that they can successfully implement trades by purchasing someone else's trading strategy, or having learned someone else's trading strategy. It is impossible to learn to look at the market with someone else's eyes (with eyes of the author of selected by you trading strategy) in order to think and to carry out trading activitiy, as the author of strategy. Of course, you will be able to learn trading strategy, the learning process will be clear. The bulk of these courses teach the theory on the examples of specific trading instruments. Rare authors of trading strategies can provide information on their application, because simply there is no such information. In the learning process, you may get the skills of trading strategy, which you will not able to adequately apply in your own trading network.
It is very important yourself or with help of your teachers to learn to analyze the market. Create your own trading strategy under yourself, you may take into account other people's experiences and opinions, but try on them under yourself.
Steytment of author of strategy allows to determine its effectiveness. Author who wrote a specific trading strategy is not yet successful. This is such trader, who defeated himself in the evolution of trader's establishment.
Trading strategy, written under a particular author, taking into account his economic interests will be more profitable, than a trading strategy which is used as template instrument. You can learn forecasting of direction, strength and depth of the prices movement in specific time frames with help of other traders, but its more efficiently to learn how to trade by yourself.
Video: "A simple day trading strategy"